Have you caught wind of the latest in finance? “HYBE’s Market Value Drops $1.1B in 5 Days – Analysts Caution on Short-Term Uncertainty.” There has been quite a stir around HYBE recently, with its market value taking a significant hit. Analysts are urging caution due to the short-term uncertainty looming over the company. Want to delve deeper into what’s happening?
Amid Escalating Conflict, HYBE Stock Plunges 12% – Individual Investors Seize Opportunity
With the escalating conflict between Min Hee-jin, the CEO of Ador, HYBE’s (352820) stock price plunged by 12% in just a week, causing its market capitalization to evaporate by over 1.2 trillion won ($1.1 billion). Sensing a looming crisis, foreign and institutional investors hurriedly offloaded their HYBE shares, whereas individual investors perceived it as an opportunity for bargain purchases and absorbed the supply.
According to the Korea Exchange on the 27th, HYBE, listed on the KOSPI, closed at 201,500 won the previous day. It recorded a 12.58% decline just within this week. From its position around 230,000 won on the 19th, the stock price is currently hovering around the 200,000 won mark.
(Photo=HYBE)
HYBE’s stock price experienced a significant drop of nearly 8% on the 22nd when news surfaced about the company invoking audit rights against Ador’s management, including CEO Min. It further decreased by 1% on the 23rd. Although there was a slight rebound on the 24th, negative sentiment intensified following CEO Min’s urgent press conference, resulting in another nearly 5% drop the previous day.
The market capitalization also took a substantial hit. While HYBE’s market capitalization stood at 9.66 trillion won ($9.9 billion) until the 19th, it plummeted to 8.39 trillion won ($8.31 billion) the previous day, marking a decrease of 1.2079 trillion won ($1.1 billion) within a week. During the same period, HYBE’s ranking in the KOSPI market capitalization also slipped from 43rd to 48th.
The supply and demand dynamics between foreigners, institutions, and individuals were starkly contrasting. Foreigners and institutions sold HYBE shares worth 36.7 billion won ($35.6 million) and 154.5 billion won ($147 million), respectively, over the five trading days from the 22nd to the 26th. Particularly, institutions were the most significant sellers of HYBE shares in the domestic stock market during this period.
On the other hand, individual investors purchased shares worth 191.7 billion won ($183 million). Following Samsung Electronics (695.8 billion won), individuals emerged as the second-largest net buyers of HYBE shares. It is interpreted that they absorbed the supply from foreigners and institutions under the belief that the stock price had hit rock bottom, seizing upon what they perceived as an opportune moment to invest.
Min Hee-jin, CEO of Ador, is speaking at a press conference held at the Korea Conference Center in Seocho-gu, Seoul, on the afternoon of the 25th (Photo= Yonhap News)
Analysts Caution on Short-Term Uncertainty as HYBE Faces Turbulent Times
Analysts in the securities industry evaluate that this situation has increased short-term uncertainty for the stock. Jin Hae-hae, a researcher at Shinhan Investment & Securities, remarked, “One of the reasons the market praised the entertainment sector was the multi-label system.” He pointed out, “CEO Min’s critique of content similarity is prompting a reevaluation of the scalability and value of further expanding the multi-label system.”
Park Soo-young, a researcher at Hanwha Investment & Securities, analyzed, “The volatility of stock prices is expected to expand in the process of confirming Newjeans’ performance without Min Hee-jin.”
However, some foresee that the long-term impact will not be significant. Ahn Do-young, a researcher at Korea Investment & Securities, stated, “As both HYBE and Adore do not desire to compromise Newjeans’ intellectual property (IP), the upcoming album activities, which are planned for release, are unlikely to be affected.” He added, “Considering the existing fan base and HYBE’s management capabilities, there is no need to view the situation pessimistically. Furthermore, investors should remain vigilant and monitor any potential developments closely to make informed decisions regarding their investments.”
